By: Suzan Hixon and Brittany Riley
We usually immediately think of designer purses, shoes, and electronics when talking about counterfeit goods. In the case of logos and brands, counterfeiting results in trademark infringement. However, the illegal imitation of products is expanding to food and drink. Recently, a renowned wine dealer, Rudy Kurniawan, was arrested for auctioning 84 bottles of counterfeit wine purporting to be from Domaine Ponsot in Burgundy, France, which were expected to sell for approximately $600,000. Prosecutors maintain that the wine was not authentic. Unfortunately for Mr. Kurniawan, the crime he is charged with is serious, as the bad-faith sale of any commodity that is known to be a counterfeit, fake or forgery is a felony.
Unfortunately, instances of “label fraud” are not new to the wine industry. Label fraud is where counterfeit labels from cult wines and other rare and expensive wines are affixed to bottles of less expensive wine and then resold. During the 1980s and 1990s, wine collector Hardy Rodenstock was infamous for selling fake “Jefferson bottles,” rare Bordeaux wines bottled for American President Thomas Jefferson.
At the surface, counterfeit wines seem to only hurt the buyer; nevertheless, label fraud can have serious repercussions for the wine market as a whole. For instance, the presence of counterfeit wines in the market has the greatest potential to impact the wine industry in the areas of financial loss, damage to brand reputation, and liability. The potential cost to vintners has caused them to look to new technologies—from security inks to micro-chipped corks to laser-coded bottles—in order to protect their brands from fraud. Other producers have worked with printers to develop graphics or micro-printed multicolored codes that are only visible with magnification. Some vintners even use holograms or unique etchings on their bottles.
The expansion of fraud within the wine industry can serve as a lesson to all trademark owners. Expanding technology will allow counterfeiters to copy almost any product, especially luxury and high-end products. Trademark owners who are worried that their product will be subject to counterfeit techniques can learn from the wine bottling and labeling industry by applying protective techniques to their own products. The use of micro-chips, microprinted multicolored codes, and holograms can be applied to various products depending on the material and cost. Although the methods used by vintners to protect their brands from fraud may seem expensive and excessive, it evidences how costly and damaging counterfeit products can be to the success of a brand and/or an entire industry.
By: Suzan Hixon and Brittany Riley
For years, women of all ages have spent countless hours creating collections of ideas in scrapbooks for outfits, future weddings and homes. In the same way that email and Facebook virtually eliminated handwritten letters, scrapbooking in its tangible form is surely dwindling with the creation of the social media site, Pinterest.
Pinterest is an internet based pin-board site where users “pin” their favorite recipes, books, clothes, photos, and quotes on customized “pinboards” for other “pinners” to follow. According to VentureBeat (www.venturebeat.com), Pinterest has become one of the top trafficked social network sites online. However, success is not always sweet.
Pinterest’s increasing popularity creates significant issues in terms of piracy and copyright law. Many Pinterest users post photographs on their pinboards without ownership of the copyright to the image. Thus, questions arise as to the potential for copyright infringement. Unsuspecting pinners use bookmarklet to pin as they browse the web. When they see an image they want to pin, the pinner simply clicks “Pin It” on their browser, designates the board to be pinned, and the image is “magically” transferred it to the designated pinboard. The process is seemingly innocent and all-too easy, but the consequences can be dire.
Pinterest warns users in the Copyright and Trademark section of their site that pinners may receive a notification that a pin has been removed due to a copyright complaint if the content’s owner makes a complaint. Those users who receive numerous copyright complaints can lose their ability to pin new images or, even worse, have their account terminated. Loss of one’s account or pinning capabilities is an insignificant consequence compared to the legal and financial ramifications that users could suffer.
Whether or not copyright owners will assert claims for infringement is yet to be seen. It could be argued that Pinterest increases website traffic and sales for owners, but not all copyright owners are retail businesses. Like the defendants in suits associated with Napster, many users are unsuspecting, well-meaning people with little or no legal knowledge. In fact, attorneys and law students alike failed to read the “fine print” when creating their Pinterest account. Now users must decide whether to take a risk and continue to discover and share their favorite images, only pin and re-pin images they own or have permission to use, or delete their account altogether.
If you decide to keep your Pinterest account, be “copyright friendly” and protect yourself by pinning the original source. By ensuring that the image you are pinning goes back to its original site you can help protect yourself from infringement claims. Also, give the original site credit for the image. See http://www.graphicsfairy-crafts.com/2012/03/how-to-find-original-source-of-image-on.html for a great tutorial on how to find the original source of an image!
If you are the owner of an image, watermark your image. Pinterest does not currently permitting the cropping of images; therefore, you should always receive credit as the original owner. If you do not wish for your image to be on Pinterest at all, take advantage of the code that Pinterest offers that can be added to the head of any page of a website to prevent images from being pinned.
My last post discussed the importance of a website audit to help avoid infringement of the IP rights of others. I briefly discussed selecting a domain name, and use of third party trademark on your website. Today, hit on copyrights, and the rights of privacy and how they relate to your website.
Use of Third Party Copyrights
It may be a breach of copyright to take graphics, text, photos, music, etc., from another site and place it on your own website without the prior consent of the author. Typically, you already own the content created by your company and its employees. For materials you are already using “with permission,” review the existing licenses, which often restrict the type of media and the territory in which you can use the media. For new known third party content, be sure to obtain a license to cover your proposed uses, or better yet, obtain an assignment of ownership rights in the content. Particularly, if the third party is not your employee, you must have a valid written work-made-for-hire agreement or some other form of written agreement transferring to you all the rights in the materials. If you obtain material from a third party and you do not have a valid work-made-for-hire agreement, you will need to get a license to use the content. And, for unknown third party content (i.e., you are not really sure where the content originated), get indemnity from the supplier of that content so that you can try to insulate yourself from possible negative legal ramifications.
Rights of Privacy
The Internet has made access to information easier, including access to personal information. There is no comprehensive privacy protection legislation in the U.S. that address the collection, storage, transmission or use of personal information on or from the Internet. Typically, in the U.S., the response has been to enact laws to target specific privacy-related issues as new technologies develop and new issues arise (e.g., Cable Communications Policy Act, the Children’s Online Privacy Protection Act, and, arguably, the USA Patriot Act.)
The European Union, however, enacted the EU Directive on the Protection of Personal Data in 1995 to harmonize privacy protection laws of the EU Member States. The EU does not consider US laws to provide adequate protection of personal data, and generally personal data may not be transferred from the EU to the US, unless the US company signs a contract to provide adequate protection for the personal data. Given the U.S.’s lack of a comprehensive privacy law, self-regulation plays an important role in the U.S. for the protection of privacy online. Although the industry is motivated to self-regulate because of the fears of overly burdensome government imposed laws, self-regulation may leave open the question of whether the privacy of Internet users is actually being maintained.
My next post will discuss the rights of publicity, and linking within websites.
While marketing your company as “green” has amazing benefits, be wary of misrepresenting your “greenness” (i.e., “greenwashing”), which can damage your credibility and make you susceptible to legal claims for false advertising.
Think it can’t happen to you? Cases in pointe:
ConAgra, a food products company, has faced a lawsuit for labeling its cooking oils as “natural” even though they are made with genetically modified ingredients. Ouch.
Sigg, the maker of the Swiss-based reusable bottle, once touted to its customers that its products were BPA-free, even though the bottles contained the chemical in their liner. After this became public, sales dropped. No word on whether they will be facing any legal liability for false advertising.
Unfortunately, “greenwashing” may just be getting worse. The Greenwashing Report from TerraChoice Group, an environmental marketing agency, has stated that more than 95% of all consumer products claiming to be green were found to commit at least one of the “seven sins of greenwashing”, which include not providing evidence (or a basis of their claims), being vague, or, yikes, flat-out lying.
So, how can you avoid greenwashing in your company’s advertising? First, keep your messages consistent and support every claim with incontrovertible evidence. Make sure you are able to back up each claim of “eco-friendly”, “99% recyclable”, etc. Next, be transparent and honest if your claims are called into question. Third, if you have any questions about what claims you may be able to make, seek out advice from an advertising attorney.